Unions to test Siemens' mettle

Civil service decamps to India

Siemens has become the new face on the dart board of the union movement after trying to outsource more jobs to India.

Nine unions joined forces this week to launch their "Public Services Not Private Profit" campaign, which asserts that when private companies run public services they do it for the benefit of their shareholders, not the public they serve.

The Public and Commercial Services Union kick-started the campaign with a challenge to Siemens' plans to offshore more National Savings & Investments jobs to India. In 1999 Siemens won a £1bn, 10 year business process outsourcing contract, which including the overhaul of IT systems and business processes, and effectively involves running all but the public bank's management. In 2004, Siemens won a £400m, five-year extension.

Danny Williamson, president of the Siemens group at the Public and Commercial Services Union, and PCS boss Mark Serwotka, bent the ear of Ivan Lewis, Economic Secretary to the Treasury, this week over the Siemens plan to outsource jobs it acquired from NS&I to India.

Since taking on a 10 year contract to run the NS&I in 1999, Siemens has cut over half the jobs it acquired to 1,800. It offshored 240 jobs two years ago without making any redundancies. It gave workers jobs elsewhere.

Siemens now proposes another plan to outsource a further 240 jobs, which might involve an as yet undetermined number of redundancies. It will have to be approved by both the government and NS&I before it goes ahead.

The PCS told Lewis the government had set a green light for "offshoring by stealth" by allowing companies like Siemens to offshore jobs.

"The public sector won't have a level playing field in future with private companies because they won't be able to compete with offshore staff. That puts hundreds of thousands of civil service jobs at risk," he said.

Even private companies pitching for public sector outsourcing business will have to calculate their bid pricing on the assumption that they will offshore civil service jobs, he said.

The business will go to the firm that can offer the cheapest price, or the "most efficient" service, as common parlance has it. Offshore jobs cost the outsourcer 25 per cent of what they would pay to have someone working in the UK, he said.

A spokeswoman for Siemens said the costs it had cut from NS&I the extent to which the National Savings is being run more efficiently and the savings could be channelled back into improvements in the bank's service.

The work had been given to Siemens in the first place in order for it to cut costs, she said.

"The government should not endorse the principle of government work being done by cheap labour abroad for no other purpose than the benefit of a multinational corporation," Williamson told The Register.

A report leaked from the Department of Work and Pensions revealed that it was seeking to have its private sector contractors move work overseas to reduce costs.

It is an element also of the transformation agenda that is taking grip across all levels of government. Ian Watmore, transformation programme from the Cabinet Office, made a vague reference to the use of foreign resources at a conference last month.

While telling public sector IT directors how they should do their jobs, he used Lord Coe's shamelessly cynical Olympic bid as a role model.

Coe had wooed the multiculturalists on the Olympic Committee by showing a video with children around the world aspiring to fulfil the Olympic dream.

He was criticised for using "foreigners" in his video, said Watmore, but the ploy worked.

"We have to do that in our own industry," he said. "We have to use the globe. We cannot be insulated from global factors, we have to use them to our advantage."

However, pressed on this subsequently, a Cabinet Office spokesman insisted Watmore meant that public sector IT directors should be merely using ideas from foreign climes, to learn from them, and not employ their people.

Twenty two MPs signed an early day motion (#1940) on Wednesday in support of the Public Services not Private Profit campaign, which called for a "moratorium on privatisation", while everyone tried to find out if it was working for the public sector.®